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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: Right now, we're gonna get right to it. We've got

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Speaker 2: a wonderful conversation here. What Oliver Wyman has done as

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Speaker 2: part of marsh Broc Clennan and Mercer and all the

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Speaker 2: rest is it gone out to people that have shown

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Speaker 2: stunning expertise in different fields, pooled them in together and

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Speaker 2: it's like a legit global consultancy. So to explain, you know,

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Speaker 2: it's like Butch Cassidy, who are the nice Scott Dan

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Speaker 2: tannebon Is sanctions. He's the one that knows who's cheating

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Speaker 2: and why they're cheating and what's going to take the will,

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Speaker 2: if you will, for in the case of Russia, for

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Speaker 2: Europe to get its act together. Hu Van Steinis was

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Speaker 2: iconic at Morgan Stanley, Ages, Ago and Finance in banking worldwide.

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Speaker 2: Huvanstinius's partner vice chair at Oliver Wyman. Daniel Tannemum partner

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Speaker 2: global anti financial crime practice leader at Oliver Wyman. Here,

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Speaker 2: let me start with you the year end, and you

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Speaker 2: know it's not like thirty pages, the one hundred and

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Speaker 2: twenty page Oliver Wyman, this is twenty twenty six. Do

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Speaker 2: you have a theme yet? It's a great question.

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Speaker 3: We'll look.

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Speaker 4: So.

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Speaker 5: I was just chatting with one of my friends about

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Speaker 5: their their outlook yesterday and they said the biggest question

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Speaker 5: for them was has the flurry of defaults? Is that

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Speaker 5: going to be a snowstorm or is it going to

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Speaker 5: be That was just a little flurry which came past us.

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Speaker 5: So this, I think the credit markets spreads are historically tight,

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Speaker 5: riskwards a little bit tighter than it was. Where does that?

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Speaker 5: Where did credit markets go from here? And is much

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Speaker 5: of a slow down? I think that's one of the

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Speaker 5: big questions on our plant's mind. Obviously the whole AI

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Speaker 5: data center growth or that off with that impetus offset,

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Speaker 5: that's clearly a baked in and a big debate too.

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Speaker 3: But lots around credit markets.

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Speaker 2: But when you're dark in the door at Oxford, did

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Speaker 2: you take cockroach four oh two?

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Speaker 6: I mean, you know the cockroaches out there?

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Speaker 5: Yeah, we don't get so many cockroaches in the UK

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Speaker 5: Chilli there private credit.

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Speaker 2: I mean, this isn't your main question for banking and

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Speaker 2: for everybody out there?

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Speaker 6: Are they going to do you sense us as cockroaches.

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Speaker 5: Look the way I take it is this feels like

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Speaker 5: a bit late cycle behavior. So you know, you imagine

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Speaker 5: we're we're a long way through a cycle. Some of

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Speaker 5: the some of what we see and you've seen on

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Speaker 5: Bloomberg this morning is fraud, some is uh, difficulties around

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Speaker 5: a K shaped economy. What the real dissonance, Tom, is

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Speaker 5: that the banks CFOs we engage with are not sensing

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Speaker 5: a big pickup in credit. They're saying it's really benign.

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Speaker 5: But obviously what the debate in the market is much

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Speaker 5: more concerned. So I think there's a real tension there

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Speaker 5: at the moment. I don't see. Look, this late cycle,

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Speaker 5: there will be more folks. The key question is are

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Speaker 5: they well spread and are they amplified? Dan, what's the

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Speaker 5: latest here on I don't know. I guess just our

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Speaker 5: tariff policy here in the US. The Supreme Court heard

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Speaker 5: some arguments last week. I guess we'll hear from them

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Speaker 5: later this year here. But what's the policy these days

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Speaker 5: on tariff's is there one?

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Speaker 4: Well, I mean, the policy is the Trump administration is

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Speaker 4: treating that hearing like it's a speed bump, if at

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Speaker 4: all okay, and really trying to come out saying we

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Speaker 4: have other authorities we can use, whether it's Section two

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Speaker 4: thirty two or three ZHO one, which are much more

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Speaker 4: limited than what the president attempted under AEPA, which is

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Speaker 4: a reminder, AEPA was created to limit the president's authorities.

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Speaker 4: So all of the rhetoric that Trump had set around

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Speaker 4: tariffs and the run up to and aftermath of Liberation

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Speaker 4: Day kind of shot the whole argument in the foot,

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Speaker 4: and it's why even the conservative justices were pretty skeptical

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Speaker 4: of the arguments made. So I think the administration is

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Speaker 4: trying to show confidence that their strategy will move forward.

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Speaker 6: Do you believe in that?

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Speaker 2: I mean, investment's over it with Morning Joe right now

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Speaker 2: talking it up. I mean, the basic gist Paul's talking

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Speaker 2: about is we've moved on from tariffs.

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Speaker 6: So I don't buy it for a minute.

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Speaker 4: We've definitely not moved on from tariffs, because if we do,

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Speaker 4: that's a key part of this administration strategy for hammering

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Speaker 4: out trade deals. So it literally kicks the stool out

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Speaker 4: from under a bunch of them. And you look at

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Speaker 4: what's happening between the US and China where there's this

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Speaker 4: detent for the moment, does that go away? Does China

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Speaker 4: begin to turn the screws again and turn off this

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Speaker 4: spigot for the five rare earths they began allowing movement of.

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Speaker 7: So part of the just the talk of this administration

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Speaker 7: has been really impacting your industry, the financial services industry

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Speaker 7: in terms of deregulation. Is that a thing or they've

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Speaker 7: been focusing so much on tariffs they haven't looked at

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Speaker 7: the banking system.

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Speaker 6: Oh.

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Speaker 5: I think that the simplification of bank rules is one

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Speaker 5: of the four big priorities for the administration. I think that,

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Speaker 5: you know, funding the data center, build out, the energy security,

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Speaker 5: the rare earth supply chains. Think about the JP Morgan

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Speaker 5: announcement about national security, huge numbers for the next decade.

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Speaker 5: So now I think that financial deregulation, financial simplifications. I mean,

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Speaker 5: as I think the industry is calling it is a

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Speaker 5: huge part of this, and I think what we're seeing it.

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Speaker 5: Think about the data center, it's all hands on deck.

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Speaker 5: The banks alone and can't do it. A private markets

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Speaker 5: alone clearly can't do it, so you need both working together.

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Speaker 5: I think that does mean that the banks are feeling,

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Speaker 5: you know, a bit of a spring and their step,

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Speaker 5: certainly the larger ones because of the And the key

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Speaker 5: question will be how much of it comes back in

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Speaker 5: buybacks and dividends versus actually really reinvested. And that's the

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Speaker 5: bet Here.

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Speaker 2: Special momenting this morning, Daniel Tanna bound Hu Vanstein is

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Speaker 2: there with Oliver Wyman, together with us in the studio.

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Speaker 2: I want to go a holistic cany I mentioned yesterday

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Speaker 2: Apple TV down Cemetery Road. It's like a travelogue for Oxford.

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Speaker 2: Basically it's centered in Oxford, and they use the Bloomberg terminal.

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Speaker 2: Great within a nice I mean, I was looking for

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Speaker 2: your pod, didn't see yeah there, but you know, you

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Speaker 2: know down Cemetery Roads doing the Bloomberg thing. You saw

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Speaker 2: Hugh von steinas and slow horses like season three they

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Speaker 2: made an appearance. I want you guys to talk about

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Speaker 2: great Britain and is a general sense Dan yours the

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Speaker 2: ugly American foreigner here you're living at your service to

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Speaker 2: the to the to the public of the United Kingdom.

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Speaker 2: From where we sit. It's turned upside down. Kit Jukes

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Speaker 2: at Sacchen this morning with a blistering Noe Jordan Rochester

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Speaker 2: models one south of one thirty. Here Von steinas where

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Speaker 2: is your nation in twelve months?

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Speaker 5: Look, it's a great question when we would have these debates,

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Speaker 5: Say fifteen years ago, the UK was mid atlantic. We did,

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Speaker 5: We had the growth rate which was mid atlantic. We

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Speaker 5: had the deregulation which was edging between the two continents.

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Speaker 5: And I think post the financial crisis and particularly Brexit,

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Speaker 5: the moment we voted to leave, the more European became.

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Speaker 5: And I think that's the challenge and that's the problem here,

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Speaker 5: that the politics has become more unstable in Itali's the

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Speaker 5: finances have become a little bit more unstable. And I

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Speaker 5: think the debate here is like will we get a

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Speaker 5: little will the pressure from the bomb market's edges back

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Speaker 5: to that mid atlanticism or we just got stuck in

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Speaker 5: a bit of a rut. And I think, look, politically

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Speaker 5: it's painful, but like everything in life, it's not all

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Speaker 5: about politics.

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Speaker 8: Stuff on the economy expert and Heathrow, in the tram

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Speaker 8: and in sanctions and all that you said on the

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Speaker 8: truck lines that the port of Dover is the relationship with.

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Speaker 2: The United Kingdom and the continent of Europe. Is it

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Speaker 2: basically shattered because of Brexit?

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Speaker 6: I don't.

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Speaker 4: I'm not sure I would agree with that. I mean,

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Speaker 4: Hugh is certainly the expert on this, but is it

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Speaker 4: shattered because of Brexit? I mean, interestingly in my world

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Speaker 4: and I was I've been in Brussels and London in

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Speaker 4: the last few weeks.

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Speaker 6: If you take the issue.

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Speaker 4: Of Russia, I think there's general alignment between the European Commission,

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Speaker 4: the British, the US, which is nice to see for

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Speaker 4: a chain. So, I mean, I think it may be

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Speaker 4: on an episodic basis, but shattered seems like a stretch.

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Speaker 6: So they're getting they're getting on, they're getting a lot,

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Speaker 6: I think.

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Speaker 5: So we'll just get back to such to finance, it's interesting,

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Speaker 5: I think the it's interesting how two big private market

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Speaker 5: films of both both bought in the UK recently, so

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Speaker 5: there's actually there's there's there's money to be made in

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Speaker 5: terms of financing. The economy may not be leaping ahead,

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Speaker 5: but there's business to be done.

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Speaker 2: Can I poss got okay? Questions here? I Vantstein is

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Speaker 2: dantan about with us. All my radar is up and

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Speaker 2: I'm biased saying go along United Kingdom. It's so gloomy, like,

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Speaker 2: what's the royal family going to do? What in God's

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Speaker 2: name is tatany I'm gonna do? Time? May you late

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Speaker 2: in the game? I mean my gut feeling is this

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Speaker 2: is the time to go long breckxit long UK? Is

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Speaker 2: that in the Oliver Wyman zeitgeist.

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Speaker 3: Look, I know, I think it's an interesting call.

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Speaker 5: I mean, the moment where you get this, the pessimism

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Speaker 5: about the UK, particularly my trip here to the US,

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Speaker 5: is profound. So I think you're right that I think

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Speaker 5: it is kind of darkest before dawn. I think the

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Speaker 5: pressure from the bomb market is going to challenge the

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Speaker 5: government to make better fiscal decisions. Look, there's a little

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Speaker 5: bit of caution, but I see a lot of interest around.

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Speaker 5: You talked about Oxford, around the universities as a huge

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Speaker 5: science parks being built. You know, the Ellison Institute is

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Speaker 5: just poured in over one hundred million into Oxford. I

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Speaker 5: think there's a lot of excitement around US science and energy.

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Speaker 5: But you know, I think it's most important to invest

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Speaker 5: through the politics, not because of.

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Speaker 7: So, Daniel tos As you mentioned some of the sanctions

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Speaker 7: on Russia and so on. We're talk to us about sanctions,

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Speaker 7: do they work at all here? Because it just seems

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Speaker 7: we have wave after wave after wave of sanctions and

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Speaker 7: these people I think they just it doesn't seem to

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Speaker 7: have an impact that well.

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Speaker 4: No, so we there was a moment a few weeks

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Speaker 4: ago when the US decided to rejoin the Global Coalition

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Speaker 4: and sanction Luke Oil and Rasneft. Those were literally the

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Speaker 4: first sanctions that the Trump administration has put on Russia's

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Speaker 4: since they took office in January. They have made a

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Speaker 4: difference because they, in doing so, put India and China

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Speaker 4: on notice that if you continue to buy, you may

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Speaker 4: have issues. Now, follow through is not necessarily a strength

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Speaker 4: of this administration on this issue, but you have seen

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Speaker 4: a reduction in barrels per day being sold. It is

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Speaker 4: beginning to hit the Russian economy. But when you look

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Speaker 4: at things like you know, Orbon coming to the White

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Speaker 4: House asking for an exemption, depending on who you ask,

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Speaker 4: indefinite or a year like that kind of doesn't help

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Speaker 4: the argument necessarily, But they are moving the needle. The

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Speaker 4: Biden administration was very reluctant to touch energy, probably too reluctant.

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Speaker 4: The Trump administration has waited way too long to re engage.

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Speaker 4: But now that they have, they have to follow through

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Speaker 4: and actually enforce the existing sanctions.

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Speaker 2: I've got a project right now John McCrae, the iconic

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Speaker 2: British author. I'm reading each of his books, trying to

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Speaker 2: go back and get a first edition evident all of

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Speaker 2: a good time. I'm on the looking glass war right now,

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Speaker 2: right after Spio came in from the cold, what's the

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Speaker 2: Russian relationship with the continent? Not so much in terms

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Speaker 2: of MI five and spying, but what's the Russian relationship

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Speaker 2: commercially with Europe right now that we don't see.

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Speaker 4: There's still trade. There's trade for nuclear fuel things like uranium.

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Speaker 4: There's still lng that they're weaning off. I think January one,

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Speaker 4: twenty seven was the date they pushed forward in the

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Speaker 4: last round of sanctions that the European Commission passed. There

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Speaker 4: is still trade like it is not dead. And the

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Speaker 4: challenge is there's still a lot of goods that are

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Speaker 4: transshipped over land borders into Russia. We have an automotive

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Speaker 4: client that will go nameless that saw like a two

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Speaker 4: hundred percent increase in cars being sold to a country

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Speaker 4: bordering Russia and said that without irony, it's like you

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Speaker 4: see what has happened here, Like the cars are being

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Speaker 4: shipped across the border. Countries like Lafia have actually stepped

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Speaker 4: up their efforts to literally block physical movement of goods

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Speaker 4: from Europe and too Russia. But there is still trade.

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Speaker 4: It is not down to nothing like that. That much

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Speaker 4: is clear.

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Speaker 2: Two great skill sets at Oliver Wyman, Hugh von stein

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Speaker 2: Is with his vice chair and Daniel Tannema'm partner here

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Speaker 2: that today on sanctions and here's just great financial expertise

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Speaker 2: as well, Passueny Worldwide with Hugh von Steiners and.

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Speaker 7: C with some hindsight here, how does the average Britain

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Speaker 7: view Brexit these days? And is it still a talking point?

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Speaker 7: Does it come up in a pub on a Friday evening?

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Speaker 5: So so okay, So there's two answers this. If you

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Speaker 5: look at the polls, there is some bars remorse, so

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Speaker 5: the majority of the population now have have regrets. But

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Speaker 5: I think this is more like thinking a head to

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Speaker 5: Thanksgiving about what are the topics which shouldn't come around.

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Speaker 3: The dining table.

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Speaker 5: So still that's still one of these topics which wow,

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Speaker 5: people put below the table iff until the fourth class

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Speaker 5: of wine.

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Speaker 2: You're usually qualified on this, Hugh von Steiners, should the

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Speaker 2: Fed enjoy the descent of the Bank of England Bank

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Speaker 2: of England recently five to four unheard of at the Fed,

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Speaker 2: we would never see that. And you know, I'm working

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Speaker 2: with Governor Kearney now running a small nation to the north.

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Speaker 2: My draw Canadians in first place. I believe q von

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Speaker 2: stein is just as simple as I can. The descent

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Speaker 2: that we've learned at the Bank of England is at

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Speaker 2: a constructive exercise.

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Speaker 3: That's a really good question.

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Speaker 5: I think it speaks to just how difficult the setup

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Speaker 5: is because you've got sluggish growth, as you've just said, Thomas,

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Speaker 5: you want low rates, but inflation keeps picking up ahead

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Speaker 5: and that's partly actually a function of breaks it, but

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Speaker 5: it's a partly function of other import markets as well.

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Speaker 5: So I can see why the committee is really stuck

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Speaker 5: and challenged. I don't think you'll get quite the same

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Speaker 5: degree of dissent over here because you don't have the

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Speaker 5: same difference and fundamentals. But I think it's it's sort

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Speaker 5: of healthy, but you know it probably speaks to the

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Speaker 5: problem rather than the committee.

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Speaker 2: People are really begging for that to a great except

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Speaker 2: one final question, Dan Tannembaham Hardwire in to the bonus

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Speaker 2: joy of Autumnal twenty twenty five Global Wall Street.

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Speaker 6: It's nuts out there.

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Speaker 2: I mean, it's a boom Wall Street economy. Exactly how

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Speaker 2: much is you know, the real estate of Greater New

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Speaker 2: York to explode a higher here with all that money

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Speaker 2: coming in to New York Wall Street.

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Speaker 6: I don't know where you're going with this one.

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Speaker 2: I mean, I do thought Hampton's gonna go up springing

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Speaker 2: into Samptons has seen record pricing.

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Speaker 6: We want to hear it.

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Speaker 4: So I don't know if that means people are migrating

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Speaker 4: east on a permanent basis or if people have just

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Speaker 4: rediscovered the beauty of the Hampton's and the off season.

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Speaker 2: With your experience, it's a boom Wall Street economy, right,

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Speaker 2: it does seem that, But I mean, what does it

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Speaker 2: take to flip it the other way?

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Speaker 4: Like if the Supreme Court rules against the tariffs, for instance,

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Speaker 4: how does the market react to that. They've been pretty

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Speaker 4: muted to some of these broader events and what that.

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Speaker 6: Call and to Supreme Court's gonna do.

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Speaker 4: I'm not on Cawshier poly market, but I feel pretty reasonable,

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Speaker 4: reasonably comfortable that they're going to overturn the and uphold

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Speaker 4: the prior decisions that the IPA tariffs are shot.

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Speaker 2: Last word is is the city enjoying the Wall Street

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Speaker 2: bomb that we see in New York.

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Speaker 3: Nowhere near as much?

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Speaker 9: No?

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Speaker 5: And I think actually there's because there's We've alwaysly got

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Speaker 5: concerns about housing taxes about to come through in two

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Speaker 5: weeks time.

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Speaker 3: So I know the housing market, you get a bargain.

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Speaker 5: In fact, the number of Americans Tom when you're coming

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Speaker 5: over to buy your John McCarey's give a house at

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Speaker 5: the same time.

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Speaker 6: It's just, it's just, it's.

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Speaker 2: Just I read the Telegraph, I read the Times. It's

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Speaker 2: I read an article on the BBC yesterday and the

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Speaker 2: Times of London. It was incomp I couldn't understand it.

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Speaker 2: I literally tried to understand what's going on there. It's

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Speaker 2: nuts over there is everybody gonna.

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Speaker 6: Leave if they put through this tax regime.

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Speaker 5: So we've already seen a significant wave of nondoms. In

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Speaker 5: other words, non Brea too had a special tax status

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Speaker 5: and you know, if I go to events in Milan

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Speaker 5: or Middle East, I mean, there's plenty of folk hoop

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Speaker 5: who've departed, and it looks it's a bit like the

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Speaker 5: debate you've had recently in New York. The tax base

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Speaker 5: is very geared towards the top one percent, so we've

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Speaker 5: already seen a stream of people leave. I don't I

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Speaker 5: think though now these taxes are more for middle classes

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Speaker 5: and that's going to be tougher. But you're you're also

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Speaker 5: seeing some of the young, the you know, the under

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Speaker 5: twenty five's move too, So I don't think this is

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Speaker 5: nineteen seventies. There's no any like that, you know, but

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Speaker 5: you know, but that's the parable. But it's it's definitely

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Speaker 5: getting It's a This is the topic of the dinner tables.

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Speaker 2: Dan.

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Speaker 6: One final question, Are you moving to Milan?

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Speaker 4: No, No, I'm staying. We just finished a long overdue renovation.

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Speaker 4: I am long in New York regardless of what's happened

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Speaker 4: in the last week.

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Speaker 6: So anyway, Tannemum, thank you so much.

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Speaker 2: With Oliver Wyman von Steinas, thank you for visiting from

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Speaker 2: the United Kingdom. Venstinas and tann Obama of Oliver Wyman together.

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Speaker 6: I love doing that here.

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Speaker 2: The conversation is what we try to do with these

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Speaker 2: two gentlemen of great expertise and sanctions and of course

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Speaker 2: in European and global finance.

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Speaker 6: Stay with us.

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Speaker 2: More from Bloomberg Surveillance coming up after this.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

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Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or

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Speaker 1: watch us live on YouTube.

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Speaker 6: Govery shutdown.

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Speaker 2: Let's do economics, Blorena or Rich joins us on Chief

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Speaker 2: you us economists the Tiro prices, we get the market

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Speaker 2: open today, Blurina, How blind are you at Tiro price

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Speaker 2: when you go to a meeting with Sebastian Page and

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Speaker 2: the other beasts? Where are you getting your information from

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Speaker 2: your belief, your conviction?

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Speaker 9: Lucky for me, Bloomberg published this alternative data charts and

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Speaker 9: tables and so on, so I'm not flying so blind anymore. Also,

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Speaker 9: lucky for me, we are a big fundamentals house with

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Speaker 9: bottoms up analysis from our credit and equity analysts, so

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Speaker 9: we're getting a lot of live information. It's just the

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Speaker 9: job has become harder because we're not relying on the

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Speaker 9: same things that we used to feed the.

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Speaker 10: Models in the past.

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Speaker 9: But what your question is, what are the private sector

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Speaker 9: data telling us. We had seen some encouraging news from

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Speaker 9: ADP that weakness in labor demand was stabilizing in October

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Speaker 9: and that we could hope for improvements going forward. The

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Speaker 9: ism employment in this is we're pointing in the same direction.

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Speaker 9: So I think I'm still leaning on that as my thesis.

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Speaker 9: But today's weekly data on ADP, which showed a decline

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Speaker 9: for the week of October twenty five, was a bit

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Speaker 9: of a setback. Now when I'm talking to investors and

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Speaker 9: Sebastian Page, what I'm emphasizing is that October will be

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Speaker 9: really noisy. It will be actively vity spending. Employment numbers

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Speaker 9: will be affected by the government shutdown. We might not

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Speaker 9: even have its ability into price data because it's too

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Speaker 9: late to collect CPI data anymore. But we'll look at November,

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Speaker 9: we'll look at December to gauge the trend of the economy.

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Speaker 9: I remain still optimistic about the path going forward, and

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Speaker 9: we can discuss together why.

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Speaker 11: That is so.

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Speaker 7: Blarena, do you have a sense of if the government

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Speaker 7: that does open in the next few days, how it

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Speaker 7: will release the data to the marketplaces or do you

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Speaker 7: have any sense of when that will occur, how that

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Speaker 7: will occur right.

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Speaker 9: This is a very important question right now because essentially

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Speaker 9: what we want to know is how much information will

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Speaker 9: the FED have before it's December tenth meeting. So let's

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Speaker 9: see the government. If the government opens later this week.

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Speaker 9: I expect that both BLSS, Census BA, they will all

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Speaker 9: release a new data schedule once they have gauged how

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Speaker 9: much time it will take them to play catch up.

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Speaker 9: I think we should get pretty quickly the September Employment

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Speaker 9: report because that would have been already prepared before the

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Speaker 9: government shut down. It was a matter of formality to

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Speaker 9: approve it. Now the BLS could go down the root

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Speaker 9: of collecting October and November employment data and that could

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Speaker 9: delay the release of the next employment report, or if

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Speaker 9: they just focus on November. It's a collection data collection

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Speaker 9: week this week and next week, so we could see

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Speaker 9: that before the FOMC meeting, and I think that would

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Speaker 9: be quite important for the fact because they won't have

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Speaker 9: the CPI report, but at least they would look at

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Speaker 9: the full employment side of their mandate before the next meeting.

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Speaker 6: Unbelievable.

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Speaker 2: I have no idea how we get to the December meeting.

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Speaker 2: We're going to continue with the Lorena her reach, she

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Speaker 2: f Us economist a Tiro price. Give us a moment

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Speaker 2: here to get the market open again. The bond market

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Speaker 2: is close today. There's a little bit of you know,

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Speaker 2: spread information in that, but it's data and frozen here in.

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Speaker 6: The bond market. The equity market not frozen.

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Speaker 2: With ready green on the screen to keep score at home,

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Speaker 2: going into the market, opening futures are negative fifteen to.

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Speaker 6: See where we end up here, but with ready green

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Speaker 6: on a screen.

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Speaker 2: An interesting veterans day.

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Speaker 6: The dollar resilient. Here's Lisa MINTEO.

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Speaker 11: You got it.

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Speaker 10: And let's start right now with the SMP five hundred.

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Speaker 10: Right now, I'm sitting some rud on the screen, down

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Speaker 10: about two tens of percent, fourteen points the level six thousand,

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Speaker 10: eight hundred and seventeen. We go to the Dow, it's

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Speaker 10: up about a ten percent seventy points forty seven four

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Speaker 10: hundred and forty four, and the Nasdaq right now down

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Speaker 10: about half a percent one hundred eighteen points at twenty

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Speaker 10: three thousand, four hundred and seven. The yield space, well

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Speaker 10: we have at the bond market closed today, so we're

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Speaker 10: not going to get that well that it'll be back

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Speaker 10: open tomorrow. Over to commodities, we have COMX gold up

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Speaker 10: about three tens percent, four thousand, one hundred and thirty

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Speaker 10: seven dollars an ounce, Brent crude up more than one percent,

439
00:21:56,600 --> 00:21:59,920
Speaker 10: sixty four dollars a barrel, WTI crewed sixty dollars a barrow.

440
00:22:00,000 --> 00:22:02,680
Speaker 10: All the Bloomberg Dollar Spot Index down about a tenth

441
00:22:02,680 --> 00:22:05,000
Speaker 10: of a percent. Checking you with chairs of a video

442
00:22:05,040 --> 00:22:07,000
Speaker 10: at the open there down about two percent. That is

443
00:22:07,040 --> 00:22:09,600
Speaker 10: your Bloomberg opening Bellerpoort, Paul and Tom.

444
00:22:10,119 --> 00:22:12,760
Speaker 2: Lisa, thank you so much. First quote here on the

445
00:22:12,800 --> 00:22:14,600
Speaker 2: develop one hundred and eight points. But it's sort of

446
00:22:14,600 --> 00:22:17,159
Speaker 2: a mess out there. We'll see as we go forward

447
00:22:17,160 --> 00:22:20,200
Speaker 2: with us. Plerina, you're reaching chief youis economist a t

448
00:22:20,400 --> 00:22:25,840
Speaker 2: rowe price? Blerina, I mean it's what is It's November eleventh? Right, yeah,

449
00:22:25,920 --> 00:22:28,680
Speaker 2: we know that date. Okay, so one week got two

450
00:22:28,680 --> 00:22:32,560
Speaker 2: weeks out, three weeks out? How do you prosecute a

451
00:22:32,600 --> 00:22:35,560
Speaker 2: FED meeting? I mean, I just I get it. It's

452
00:22:35,600 --> 00:22:39,960
Speaker 2: original territory, but how original will it be in December.

453
00:22:42,040 --> 00:22:44,480
Speaker 9: I think it will be pretty tough this meeting. We

454
00:22:44,560 --> 00:22:48,600
Speaker 9: know the committee is already quite divided between cut in

455
00:22:48,680 --> 00:22:52,639
Speaker 9: December and staying put because they're worried about employment on

456
00:22:52,680 --> 00:22:55,720
Speaker 9: the one side and inflationary pressures on the other side.

457
00:22:56,000 --> 00:22:58,560
Speaker 9: And I feel like because we don't have new data

458
00:22:58,600 --> 00:23:02,119
Speaker 9: and information, it will take that much more to shift

459
00:23:02,200 --> 00:23:05,160
Speaker 9: either hawks or doves from their position. So it could

460
00:23:05,160 --> 00:23:08,480
Speaker 9: be quite a hot and contested meeting. What do they

461
00:23:08,520 --> 00:23:12,439
Speaker 9: need to see? The thing is October, first month of

462
00:23:12,480 --> 00:23:15,120
Speaker 9: the quarter. We know that the spending data and activity

463
00:23:15,200 --> 00:23:18,439
Speaker 9: data will be affected by the government shut down. The

464
00:23:18,440 --> 00:23:22,320
Speaker 9: CBO estimates seven hundred and fifty thousand furloughed workers from

465
00:23:22,359 --> 00:23:26,120
Speaker 9: federal government. That's four tenths of a percentage point effect

466
00:23:26,200 --> 00:23:28,960
Speaker 9: on the unemployment rate. That could show up in the

467
00:23:29,000 --> 00:23:33,520
Speaker 9: unemployment numbers. Now the FMC needs to figure out wherether

468
00:23:33,680 --> 00:23:38,119
Speaker 9: that's noise or whether it's continued weakness from the summer months.

469
00:23:38,119 --> 00:23:40,000
Speaker 9: So it's going to be pretty tough. And on top

470
00:23:40,040 --> 00:23:43,080
Speaker 9: of that, they won't have the information they need on

471
00:23:43,119 --> 00:23:46,000
Speaker 9: the price side to say, Okay, there is some softness

472
00:23:46,000 --> 00:23:49,200
Speaker 9: in the labor market, but we have some uptick in inflation,

473
00:23:49,359 --> 00:23:52,400
Speaker 9: So those two things might cancel themselves out. So it's

474
00:23:52,400 --> 00:23:56,119
Speaker 9: going to be a pretty difficult meeting. I think to navigate.

475
00:23:56,240 --> 00:24:00,840
Speaker 2: They're blind down price. All that got does the price

476
00:24:00,880 --> 00:24:02,320
Speaker 2: of the market, which yield?

477
00:24:02,640 --> 00:24:02,720
Speaker 4: Ye?

478
00:24:03,040 --> 00:24:06,520
Speaker 6: Do they make a FED decision of the two year? Sweeny? You,

479
00:24:07,040 --> 00:24:07,520
Speaker 6: I don't know.

480
00:24:07,600 --> 00:24:10,119
Speaker 7: I don't know, so, Lourina, what do you think is

481
00:24:10,160 --> 00:24:12,120
Speaker 7: the focus of this FED here coming up on their

482
00:24:12,680 --> 00:24:15,280
Speaker 7: February sorry, December tenth meeting here?

483
00:24:15,640 --> 00:24:19,920
Speaker 11: Inflation? Employment? What's taking center stage? Do you believe?

484
00:24:21,160 --> 00:24:23,679
Speaker 9: I feel that we're still on the tail end of

485
00:24:23,720 --> 00:24:27,480
Speaker 9: the full employment concerns. It feels a bit like twenty

486
00:24:27,600 --> 00:24:30,719
Speaker 9: twenty four when they were worried about the labor market

487
00:24:30,920 --> 00:24:34,840
Speaker 9: rolling over quickly and they were worried about activity. I

488
00:24:34,960 --> 00:24:39,119
Speaker 9: get a taste of that situation right now too, So

489
00:24:39,160 --> 00:24:41,280
Speaker 9: we are at the tail end of them focusing on

490
00:24:41,320 --> 00:24:46,280
Speaker 9: full employment. I think next year, and perhaps even as

491
00:24:46,320 --> 00:24:49,639
Speaker 9: soon as after the December of MC meeting, the shift

492
00:24:49,680 --> 00:24:52,520
Speaker 9: will be towards inflation, because I do expect that we

493
00:24:52,600 --> 00:24:56,080
Speaker 9: see those effects of the tariffs picking up in Q four.

494
00:24:56,440 --> 00:24:58,960
Speaker 9: I also think the dollar weakness since the beginning of

495
00:24:59,000 --> 00:25:03,120
Speaker 9: the year will push import prices. Also in January, we're

496
00:25:03,160 --> 00:25:05,720
Speaker 9: going to get that price reset that we've seen since

497
00:25:05,760 --> 00:25:08,760
Speaker 9: the pandemic. A lot of companies will reset prices at

498
00:25:08,800 --> 00:25:11,520
Speaker 9: the beginning of the year, and so I do think

499
00:25:11,600 --> 00:25:15,200
Speaker 9: the focus will shift to inflation, but we're not there yet.

500
00:25:15,400 --> 00:25:17,520
Speaker 2: Brilliana, Thank you so much. Great brief here at a

501
00:25:17,560 --> 00:25:20,560
Speaker 2: tough time for economists. Bleirino, Richie's with.

502
00:25:20,600 --> 00:25:22,880
Speaker 6: Tea row Price. Stay with us.

503
00:25:23,119 --> 00:25:33,400
Speaker 2: More from Bloomberg Surveillance coming up after this.

504
00:25:33,400 --> 00:25:37,320
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

505
00:25:37,359 --> 00:25:40,400
Speaker 1: starting at seven am Eastern on Apple, Cocklay and Android

506
00:25:40,400 --> 00:25:43,439
Speaker 1: Auto with the Bloomberg Business app. You can also listen

507
00:25:43,520 --> 00:25:46,800
Speaker 1: live on Amazon Alexa from our flagship New York station,

508
00:25:47,320 --> 00:25:49,960
Speaker 1: Just say Alexa play Bloomberg eleven thirty.

509
00:25:50,080 --> 00:25:54,000
Speaker 2: John Stolphus gives us clinic here he's with Oppenheimer and

510
00:25:54,200 --> 00:25:57,359
Speaker 2: a company the chief investment officer. The greatest thing about

511
00:25:57,359 --> 00:26:01,960
Speaker 2: your notes, John, is you address the fear is this

512
00:26:02,080 --> 00:26:05,560
Speaker 2: a repeat of the late nineties the dot com bubble?

513
00:26:06,160 --> 00:26:10,000
Speaker 2: We do not believe, so discuss well. Tom, great to

514
00:26:10,040 --> 00:26:11,000
Speaker 2: be here with you today.

515
00:26:11,720 --> 00:26:14,000
Speaker 12: I've got to say that we do not think that

516
00:26:14,080 --> 00:26:17,199
Speaker 12: this is the tech bubble at all, and it's a

517
00:26:17,320 --> 00:26:21,520
Speaker 12: very different The structure is decidedly different in the I

518
00:26:21,560 --> 00:26:24,679
Speaker 12: remember exactly where I was during the tech bubble. I

519
00:26:24,760 --> 00:26:28,080
Speaker 12: was fortunate that that time I was a manager of

520
00:26:28,160 --> 00:26:33,240
Speaker 12: international equity marketing, so I was working with privatized telephonies,

521
00:26:33,440 --> 00:26:36,960
Speaker 12: all kinds of things around in Europe and Latin America,

522
00:26:37,080 --> 00:26:39,040
Speaker 12: and I was pretty clear of the tech bubble, but

523
00:26:39,080 --> 00:26:40,960
Speaker 12: I watched it happen because I was very much in

524
00:26:41,080 --> 00:26:44,960
Speaker 12: close proximity at that time. It was tech was rather

525
00:26:45,080 --> 00:26:47,280
Speaker 12: primitive if we look back on it. I mean we

526
00:26:47,359 --> 00:26:51,200
Speaker 12: had the modems that we'd pluck into the wall, yeah,

527
00:26:51,560 --> 00:26:54,359
Speaker 12: and the frozen screens that would occur even at the

528
00:26:55,240 --> 00:26:58,600
Speaker 12: well known firms around town. Your best friend was the

529
00:26:58,640 --> 00:27:02,520
Speaker 12: tech person all the time. Against we call it peace Sweeny.

530
00:27:03,240 --> 00:27:06,760
Speaker 12: And today what we have is file lunch in nine

531
00:27:06,960 --> 00:27:08,960
Speaker 12: never please kill Yeah, right.

532
00:27:09,160 --> 00:27:09,679
Speaker 6: The marvels.

533
00:27:09,680 --> 00:27:12,400
Speaker 12: When you'd hear the cart come down the hallway, I'd

534
00:27:12,400 --> 00:27:15,159
Speaker 12: start barking, you know, and to make sure I have

535
00:27:15,200 --> 00:27:19,320
Speaker 12: the cheesecake with the caramel frosting on it. But sec

536
00:27:20,160 --> 00:27:23,240
Speaker 12: where we are today I think is structurally you have

537
00:27:23,680 --> 00:27:27,080
Speaker 12: technology is deeply embedded in the lives of both the

538
00:27:27,520 --> 00:27:30,440
Speaker 12: consumer as well as business. We all rely, we're all

539
00:27:30,480 --> 00:27:33,000
Speaker 12: on the upgrade cycle, whether we like it or not.

540
00:27:33,680 --> 00:27:37,359
Speaker 12: And these big companies are highly profitable, you know, the

541
00:27:37,400 --> 00:27:40,919
Speaker 12: world of positive cash flow and developments. If anything, probably

542
00:27:40,920 --> 00:27:44,960
Speaker 12: the biggest risk is that governments around the world might

543
00:27:45,000 --> 00:27:47,600
Speaker 12: want to break them up. And at this point even

544
00:27:47,640 --> 00:27:51,240
Speaker 12: that probably wouldn't be so bad because probably the individual

545
00:27:51,280 --> 00:27:53,560
Speaker 12: pieces are worth more than the sum of the parts.

546
00:27:53,960 --> 00:27:57,199
Speaker 12: So I think it's a different world, John. We just

547
00:27:57,240 --> 00:27:59,960
Speaker 12: got pretty much through earning season. I seem to be

548
00:28:00,080 --> 00:28:02,600
Speaker 12: pretty solid earnings. Is it enough to support this marketplace?

549
00:28:02,640 --> 00:28:03,000
Speaker 2: Do you think?

550
00:28:03,280 --> 00:28:04,240
Speaker 6: Let me tell you that.

551
00:28:04,400 --> 00:28:07,520
Speaker 12: I've got to say, Paul, the earnings are just marvelous

552
00:28:07,560 --> 00:28:10,400
Speaker 12: this time around. When you consider that nine, let's say

553
00:28:10,520 --> 00:28:15,040
Speaker 12: nine sectors are positive. Of those five or double digit growth,

554
00:28:15,040 --> 00:28:17,480
Speaker 12: and it's a mix of what you would.

555
00:28:17,240 --> 00:28:19,840
Speaker 11: Call a value as well as growth.

556
00:28:19,880 --> 00:28:22,200
Speaker 12: So you've got tech right in there, but you've also

557
00:28:22,320 --> 00:28:26,520
Speaker 12: got good representation. Even materials is doing fairly well right now.

558
00:28:26,560 --> 00:28:30,560
Speaker 12: With the earnings growth, you've got positive there. So when

559
00:28:30,600 --> 00:28:33,639
Speaker 12: we look at it, if anything, we think the rally

560
00:28:33,680 --> 00:28:38,280
Speaker 12: has broadened, but it's still driven by technology because technology

561
00:28:38,360 --> 00:28:41,760
Speaker 12: drive technology like credit makes the world.

562
00:28:41,520 --> 00:28:44,080
Speaker 11: Go around when it comes to finance and the market.

563
00:28:44,120 --> 00:28:47,280
Speaker 12: I really believe no matter what the turbulence is in

564
00:28:47,520 --> 00:28:52,160
Speaker 12: Washington or Beijing or Moscow, the ultimately what they're really

565
00:28:52,200 --> 00:28:54,880
Speaker 12: carrying about is revenue growth and profit growth.

566
00:28:55,080 --> 00:28:55,680
Speaker 11: We've got it.

567
00:28:55,800 --> 00:28:56,480
Speaker 6: We start strong.

568
00:28:56,560 --> 00:28:59,680
Speaker 2: This morning, Jen Sofis Oppenheimer in company with this Good

569
00:28:59,680 --> 00:29:02,440
Speaker 2: Morning in New York down to Washington ninety nine and

570
00:29:02,480 --> 00:29:04,760
Speaker 2: one FM Good Morning, a serious extension of.

571
00:29:04,760 --> 00:29:07,000
Speaker 6: One twenty one. I have no idea how large that

572
00:29:07,080 --> 00:29:11,080
Speaker 6: audience is. Well, it's like old technology. Sure it's still rocketed. Yeah,

573
00:29:11,320 --> 00:29:15,920
Speaker 6: you know across Canada as well. Paul suite with John stolfhis.

574
00:29:15,560 --> 00:29:17,840
Speaker 7: Hey John, So you know, one of the concerns in

575
00:29:17,840 --> 00:29:21,200
Speaker 7: this marketplace is AI. It's been such a big, big

576
00:29:21,240 --> 00:29:24,760
Speaker 7: theme in this marketplace really for the last two plus years,

577
00:29:24,800 --> 00:29:27,280
Speaker 7: not just in the technology sect, but just kind of across.

578
00:29:27,000 --> 00:29:28,080
Speaker 11: The market in general.

579
00:29:28,280 --> 00:29:31,360
Speaker 7: Are you concerned that, I don't know, we're in an

580
00:29:31,400 --> 00:29:32,800
Speaker 7: AI bubble.

581
00:29:32,480 --> 00:29:35,200
Speaker 12: Maybe for so many sectors, you know, Paul, I really

582
00:29:35,240 --> 00:29:38,680
Speaker 12: think where the bubbles may be found or probably in

583
00:29:38,680 --> 00:29:41,640
Speaker 12: the areas of meme stocks and cryptos. But when it

584
00:29:41,720 --> 00:29:45,080
Speaker 12: comes to AI, when we talk to people, whether it

585
00:29:45,200 --> 00:29:51,840
Speaker 12: is private investors, just general consumers looking for things. Civilians

586
00:29:52,080 --> 00:29:55,120
Speaker 12: are using AI more and more all the time.

587
00:29:54,920 --> 00:29:56,560
Speaker 11: And within business, you know.

588
00:29:56,600 --> 00:29:58,720
Speaker 12: I can remember a few months ago I attended the

589
00:29:59,120 --> 00:30:04,200
Speaker 12: Institutional Audience conference here at Bloomberg, and it was a.

590
00:30:04,160 --> 00:30:04,920
Speaker 11: Mix of people.

591
00:30:04,960 --> 00:30:08,560
Speaker 12: It wasn't just people from finance, but it was healthcare

592
00:30:08,600 --> 00:30:12,920
Speaker 12: and different different sectors and everybody people normally, and they

593
00:30:12,960 --> 00:30:17,080
Speaker 12: were I've met a person from healthcare who said, oh,

594
00:30:17,120 --> 00:30:20,760
Speaker 12: how she loves doing research with AI because it makes

595
00:30:20,760 --> 00:30:23,280
Speaker 12: her so much more efficient. And then at one point

596
00:30:23,320 --> 00:30:25,760
Speaker 12: she said, sometimes I think it's better than me, And

597
00:30:25,800 --> 00:30:29,240
Speaker 12: I said, don't say that, because I think the other

598
00:30:29,280 --> 00:30:32,080
Speaker 12: thing is I don't think AI is going to replace

599
00:30:32,160 --> 00:30:36,160
Speaker 12: humanity because it has no uh, it has no sympathy

600
00:30:36,240 --> 00:30:38,680
Speaker 12: or empathy, and it's apart from here.

601
00:30:39,000 --> 00:30:42,120
Speaker 6: Were you seven thousand, seventy one hundreds?

602
00:30:42,720 --> 00:30:43,280
Speaker 11: Just kill them?

603
00:30:43,320 --> 00:30:46,680
Speaker 6: Can we make some newsier? Lisa? Give them? Give them, Tito,

604
00:30:48,000 --> 00:30:49,600
Speaker 6: can you get the seventy two hundred?

605
00:30:50,120 --> 00:30:53,400
Speaker 12: You know, I think that seventy one hundred could be surpassed,

606
00:30:53,440 --> 00:30:55,400
Speaker 12: but I'm sticking with the seventy one.

607
00:30:55,520 --> 00:30:57,600
Speaker 11: At this point is pretty late in the year. The

608
00:30:57,680 --> 00:30:58,280
Speaker 11: gloom Crew.

609
00:30:58,360 --> 00:31:03,400
Speaker 2: The foundational discussion is the earnings juggernaut, the cash flow

610
00:31:03,480 --> 00:31:06,840
Speaker 2: juggernaut will end. Do you see it ending for the

611
00:31:06,960 --> 00:31:10,320
Speaker 2: chosen few? Or does it continue to disperse to a

612
00:31:10,360 --> 00:31:13,360
Speaker 2: better earning season for all the other stocks?

613
00:31:13,760 --> 00:31:15,600
Speaker 12: I think, you know, at this point, I think we

614
00:31:16,040 --> 00:31:18,400
Speaker 12: begin to see I mean, this earning season looks. What

615
00:31:18,520 --> 00:31:21,600
Speaker 12: We've got earnings growth up eleven point seven percent on

616
00:31:21,720 --> 00:31:25,920
Speaker 12: back of eight point one percent revenue growth. You've got

617
00:31:26,000 --> 00:31:30,200
Speaker 12: tech twenty four percent growth year over year financial Q

618
00:31:30,280 --> 00:31:33,600
Speaker 12: three or year over year twenty three point nine, so

619
00:31:33,640 --> 00:31:38,280
Speaker 12: that's another twenty four piece. You've got materials double digit growth,

620
00:31:38,360 --> 00:31:41,840
Speaker 12: industrials double digit growth. This is looking pretty good, and

621
00:31:42,160 --> 00:31:45,760
Speaker 12: the single digits aren't bad. And you've only got two

622
00:31:45,760 --> 00:31:50,080
Speaker 12: sectors with negative growth. That's energy negative two point two

623
00:31:50,120 --> 00:31:54,480
Speaker 12: six percent on the screen and communication services eight point

624
00:31:54,600 --> 00:31:56,880
Speaker 12: one nine percent, and that some of that may be

625
00:31:56,960 --> 00:32:01,960
Speaker 12: the result of just incredible investment, a watershed period related

626
00:32:01,960 --> 00:32:04,360
Speaker 12: to AI technology.

627
00:32:04,440 --> 00:32:06,000
Speaker 11: So where do we go from here?

628
00:32:06,200 --> 00:32:10,080
Speaker 7: John? I mean, we've had a crazy year, excellent return

629
00:32:10,200 --> 00:32:12,560
Speaker 7: so far after that volatility in the beginning of the year.

630
00:32:13,120 --> 00:32:15,080
Speaker 7: How are you positioning twenty twenty six?

631
00:32:15,600 --> 00:32:18,640
Speaker 12: Well, right now, you know, we won't make our official

632
00:32:19,120 --> 00:32:22,840
Speaker 12: calls until mid December when we usually do because we're

633
00:32:22,840 --> 00:32:24,480
Speaker 12: not we don't have X ray vision.

634
00:32:24,640 --> 00:32:29,000
Speaker 6: Yes, we'll go to seventy two hundred. I like that.

635
00:32:30,480 --> 00:32:32,720
Speaker 11: I'm trying to clouds the situation there.

636
00:32:33,240 --> 00:32:36,880
Speaker 12: But what we what we would say is we probably

637
00:32:36,920 --> 00:32:39,640
Speaker 12: where we're standing, not in terms of the index itself,

638
00:32:39,680 --> 00:32:43,320
Speaker 12: but for years now we have been cyclicals over defensives.

639
00:32:43,600 --> 00:32:48,640
Speaker 12: So emphasis on cyclicals and primarily large caps, but with

640
00:32:48,720 --> 00:32:52,200
Speaker 12: a smattering of always hope for the mids and the smalls.

641
00:32:52,240 --> 00:32:54,440
Speaker 11: But I think until the FED really cuts rates, I

642
00:32:54,480 --> 00:32:56,280
Speaker 11: don't think they got to get much love point.

643
00:32:56,880 --> 00:32:59,560
Speaker 2: I'll take the juggernaut and Dan I says Microsoft is

644
00:32:59,560 --> 00:33:05,479
Speaker 2: a founder of this dialogue. Is Microsoft a cyclical in nature? Well,

645
00:33:05,480 --> 00:33:08,680
Speaker 2: I mean it's a really philosophical question. We're in buffet,

646
00:33:09,000 --> 00:33:12,800
Speaker 2: he's ninety five, he's going quiet. Yes, sofas won't shut up.

647
00:33:13,120 --> 00:33:15,840
Speaker 2: That's the opposite of buffet. I mean the bottom the

648
00:33:15,920 --> 00:33:19,120
Speaker 2: bottom line is some of these tech stacks have.

649
00:33:19,160 --> 00:33:21,440
Speaker 6: Almost cyclical characteristics.

650
00:33:21,480 --> 00:33:24,000
Speaker 11: Oh, we most certainly think so. And in fact, in

651
00:33:24,040 --> 00:33:25,480
Speaker 11: the old days, you.

652
00:33:25,440 --> 00:33:28,640
Speaker 12: Know, back when we used to call consumers staples a

653
00:33:28,680 --> 00:33:34,680
Speaker 12: defensive sector coke, smokes and soaps, technology was regarded as

654
00:33:34,680 --> 00:33:37,560
Speaker 12: a cyclical, and we regard it as a cyclical because

655
00:33:37,600 --> 00:33:41,160
Speaker 12: the while the investment appears to be a secular issue

656
00:33:41,160 --> 00:33:45,880
Speaker 12: and the developments are the actual investment is there's sentiment

657
00:33:46,000 --> 00:33:46,920
Speaker 12: behind that, even at.

658
00:33:46,840 --> 00:33:49,800
Speaker 11: The institutional level in terms of Palo Alto.

659
00:33:49,800 --> 00:33:52,320
Speaker 7: John, how much does this market need the FED to

660
00:33:52,360 --> 00:33:53,840
Speaker 7: continue to cut races here question?

661
00:33:55,160 --> 00:34:00,200
Speaker 12: You know, we we have been for the last few years,

662
00:34:00,360 --> 00:34:02,200
Speaker 12: you know, the last two years when a lot of

663
00:34:02,200 --> 00:34:05,600
Speaker 12: people were expecting a lot more cuts, expecting that Jerome

664
00:34:05,640 --> 00:34:09,480
Speaker 12: Powell would be very careful with cutting rates. We were

665
00:34:09,520 --> 00:34:14,120
Speaker 12: looking for this year maximum of three cuts, and then

666
00:34:14,200 --> 00:34:15,840
Speaker 12: it looked for a while it was only going to

667
00:34:15,920 --> 00:34:18,400
Speaker 12: be two cuts. But I think we're going to do

668
00:34:19,440 --> 00:34:21,840
Speaker 12: I think he will do it another cut of twenty five.

669
00:34:21,680 --> 00:34:23,160
Speaker 11: Bibs in December, okay.

670
00:34:23,400 --> 00:34:26,560
Speaker 12: And the big thing is the FED is very very

671
00:34:26,719 --> 00:34:30,719
Speaker 12: sensitive as to how it practices. It's dual mandate, and

672
00:34:31,120 --> 00:34:34,960
Speaker 12: the dual mandate being supporting a Curlian question.

673
00:34:35,200 --> 00:34:37,719
Speaker 2: I mean, Paul, you're too young to remember this, Sulphus

674
00:34:37,719 --> 00:34:40,640
Speaker 2: and I remember Arthur Burns and you have a pipe

675
00:34:40,640 --> 00:34:43,399
Speaker 2: and you go, he's making circles with his pipe.

676
00:34:43,440 --> 00:34:44,400
Speaker 6: What's it mean? What's that?

677
00:34:44,840 --> 00:34:48,839
Speaker 2: What do you think of the modern complete fixation on

678
00:34:48,880 --> 00:34:51,919
Speaker 2: the FED. I mean we've gone from Marty's wide don't

679
00:34:51,920 --> 00:34:55,239
Speaker 2: fight the FED to a twenty four to seven fixation

680
00:34:55,920 --> 00:34:56,879
Speaker 2: on the FED.

681
00:34:56,960 --> 00:34:58,320
Speaker 6: And your glory.

682
00:34:58,560 --> 00:35:01,680
Speaker 2: You look at Ernie's cashlow, you look at revenue growth.

683
00:35:02,320 --> 00:35:03,640
Speaker 6: Do we do too much Fed?

684
00:35:03,920 --> 00:35:04,000
Speaker 4: No?

685
00:35:04,200 --> 00:35:06,279
Speaker 12: You know, I think it's important to look at the FED.

686
00:35:06,320 --> 00:35:09,719
Speaker 12: If anything in our research which is fundamentally driven, it's

687
00:35:09,840 --> 00:35:12,480
Speaker 12: revenue and earnings growth, but very much an eye to

688
00:35:12,520 --> 00:35:15,359
Speaker 12: FED policy. And we think we are living with the

689
00:35:15,400 --> 00:35:19,400
Speaker 12: benefit of what I called the ben Bernanke legacy because

690
00:35:19,520 --> 00:35:22,239
Speaker 12: Arthur Burns was a disaster. Then as a result of

691
00:35:22,280 --> 00:35:24,799
Speaker 12: that you had Paul Walker had to come in and

692
00:35:24,840 --> 00:35:28,560
Speaker 12: take draconian measures. Remember just about what I came in

693
00:35:28,560 --> 00:35:30,479
Speaker 12: in eighty three, just about a year and a half,

694
00:35:30,520 --> 00:35:32,920
Speaker 12: two years before I got in, the yield on the

695
00:35:32,960 --> 00:35:37,520
Speaker 12: ten year almost reached sixteen percent. That was real wild

696
00:35:37,560 --> 00:35:40,719
Speaker 12: inflation with you know, the current generation thinks that nine

697
00:35:40,719 --> 00:35:43,719
Speaker 12: point seven was a lot in March of twenty two.

698
00:35:43,880 --> 00:35:49,920
Speaker 12: But that Ben Bernanke legacy, high transparency, communications, it carries

699
00:35:50,000 --> 00:35:53,120
Speaker 12: on through Jerome Powell and that balance where you want

700
00:35:53,120 --> 00:35:56,600
Speaker 12: to see the FED a nurture a sustainable growth in

701
00:35:56,719 --> 00:35:59,960
Speaker 12: economic growth, but at the same time not overthrow the

702
00:36:00,160 --> 00:36:03,800
Speaker 12: apple cart in terms of employment in jobs and avoid

703
00:36:03,840 --> 00:36:07,799
Speaker 12: a recession, which they have done notwithstanding all the predictions

704
00:36:07,840 --> 00:36:12,719
Speaker 12: of inflight of recession since twenty twenty two, so far

705
00:36:12,840 --> 00:36:15,120
Speaker 12: no recession, which I think is extraordinary.

706
00:36:15,520 --> 00:36:19,200
Speaker 7: John o'b we don't talk about these days is tariffs

707
00:36:19,360 --> 00:36:21,560
Speaker 7: and the impact on economy is that kind of in

708
00:36:21,560 --> 00:36:22,120
Speaker 7: our rearview?

709
00:36:22,160 --> 00:36:22,960
Speaker 6: Do you think you know?

710
00:36:23,560 --> 00:36:25,759
Speaker 12: I belonged to the camp the g I wish they

711
00:36:25,800 --> 00:36:28,279
Speaker 12: hadn't gone on that tariff route, though when I look

712
00:36:28,320 --> 00:36:32,440
Speaker 12: at it as a strategist, I think as a tactical maneuver,

713
00:36:32,520 --> 00:36:36,320
Speaker 12: it sure got the attention of all the countries around

714
00:36:36,320 --> 00:36:39,400
Speaker 12: the world because, in essence, over the course of the

715
00:36:39,440 --> 00:36:41,240
Speaker 12: last eighty years since World War.

716
00:36:41,080 --> 00:36:44,080
Speaker 11: Two, the US had a policy.

717
00:36:43,640 --> 00:36:47,319
Speaker 12: Where we exported our manufacturing just so fas, thank you

718
00:36:47,360 --> 00:36:47,759
Speaker 12: so much.

719
00:36:47,840 --> 00:36:52,319
Speaker 2: Just a brilliant, brilliant dissertation there on SPX A path

720
00:36:52,400 --> 00:36:54,839
Speaker 2: to seventy one hundred.

721
00:36:54,360 --> 00:36:55,280
Speaker 6: Stay with us.

722
00:36:55,320 --> 00:37:05,600
Speaker 2: More from Bloomberg Surveillance coming up after this.

723
00:37:05,600 --> 00:37:09,520
Speaker 1: This is the Bloomberg Surveillance podcast. Listen live each weekday

724
00:37:09,560 --> 00:37:12,960
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

725
00:37:13,000 --> 00:37:15,959
Speaker 1: with the Bloomberg Business app. You can also listen live

726
00:37:16,040 --> 00:37:19,600
Speaker 1: on Amazon Alexa from our flagship New York station. Just

727
00:37:19,640 --> 00:37:22,399
Speaker 1: say Alexa, play Bloomberg eleven thirty time.

728
00:37:22,440 --> 00:37:25,680
Speaker 2: For the newspapers, here are we a guana free?

729
00:37:25,760 --> 00:37:26,359
Speaker 6: In the news site?

730
00:37:26,400 --> 00:37:27,719
Speaker 10: We are a guana free?

731
00:37:29,760 --> 00:37:30,080
Speaker 2: All right.

732
00:37:30,080 --> 00:37:31,759
Speaker 10: I'm starting with the Wall Street Journal. I'm not sure

733
00:37:31,760 --> 00:37:35,160
Speaker 10: if you noticed, but luxury hotels they're charging this record

734
00:37:35,400 --> 00:37:38,800
Speaker 10: high premium, okay, more than usual, but it's not stopping

735
00:37:38,840 --> 00:37:42,319
Speaker 10: those affluent travelers from splurging. Okay. So they had some

736
00:37:42,440 --> 00:37:44,480
Speaker 10: data to show that the average daily room rate at

737
00:37:44,560 --> 00:37:47,680
Speaker 10: US luxury hotel a record high three hundred and ninety

738
00:37:47,680 --> 00:37:50,239
Speaker 10: four dollars this year. That's the average, okay, But when

739
00:37:50,239 --> 00:37:53,000
Speaker 10: you look at let's say Paris, where a luxury room

740
00:37:53,040 --> 00:37:56,320
Speaker 10: will run about one thousand dollars away, the average price

741
00:37:56,320 --> 00:37:58,839
Speaker 10: of most expensive ones about twenty six hundred a night.

742
00:37:59,360 --> 00:38:02,480
Speaker 10: New York have ultra luxury hotels at about fifteen hundred

743
00:38:02,560 --> 00:38:05,319
Speaker 10: some two thousand a night, but still bookings for those

744
00:38:05,360 --> 00:38:07,480
Speaker 10: properties were up two and a half percent this year

745
00:38:07,520 --> 00:38:11,120
Speaker 10: through September. A lot of those luxury hotels are expanding too,

746
00:38:11,320 --> 00:38:13,960
Speaker 10: So the prices are going up, but people are still splurging.

747
00:38:14,000 --> 00:38:17,239
Speaker 2: Anthony Capiono Marriott I said this repeatedly.

748
00:38:17,360 --> 00:38:19,400
Speaker 11: Yes, they completely.

749
00:38:18,760 --> 00:38:23,680
Speaker 2: Misunderestimated the luxury hotel drive. I mean there is I

750
00:38:23,719 --> 00:38:28,760
Speaker 2: know in Paris, We've got offspring over there. And basically

751
00:38:28,840 --> 00:38:31,600
Speaker 2: I have a secret literally, I have a secret hotel

752
00:38:32,600 --> 00:38:34,799
Speaker 2: that's within this you know, the circle of tourism and

753
00:38:34,840 --> 00:38:36,920
Speaker 2: all that. But I have a secret hotel that I

754
00:38:36,960 --> 00:38:39,920
Speaker 2: tell no one about. I'm so afraid exactly people.

755
00:38:40,000 --> 00:38:43,040
Speaker 11: That's a shafey economy. Okay, shafed economy, yep.

756
00:38:43,239 --> 00:38:46,560
Speaker 10: Crazy, not good, not good, Okay, this one I want.

757
00:38:46,600 --> 00:38:47,839
Speaker 10: I want to stick with the ultra rich.

758
00:38:47,840 --> 00:38:48,480
Speaker 11: Okay, there you go.

759
00:38:48,640 --> 00:38:51,840
Speaker 10: There they go. They are scooping up penthouses in Dubai.

760
00:38:52,160 --> 00:38:54,680
Speaker 10: It's one of the world's hottest property markets right now.

761
00:38:55,360 --> 00:38:58,479
Speaker 10: They're paying top dollars for places that are not even

762
00:38:58,560 --> 00:38:59,160
Speaker 10: built yet.

763
00:38:59,239 --> 00:39:00,839
Speaker 11: Okay, this is bidding.

764
00:39:00,520 --> 00:39:04,680
Speaker 10: Wars at Brookfield Properties. New luxury project in Dubai prices Okay,

765
00:39:04,680 --> 00:39:07,479
Speaker 10: here it is for waterfront apartments pushing above twenty four

766
00:39:07,640 --> 00:39:10,719
Speaker 10: million dollars. They have water the waterfront, yes they do.

767
00:39:11,480 --> 00:39:15,040
Speaker 10: They do it so house hunters they have to prove

768
00:39:15,080 --> 00:39:17,759
Speaker 10: they have the cash, all right, I got it now. Yes,

769
00:39:17,800 --> 00:39:19,600
Speaker 10: in order to express interest, you have to hand over

770
00:39:20,280 --> 00:39:22,600
Speaker 10: a cash for check for two hundred and seventy two

771
00:39:22,719 --> 00:39:24,160
Speaker 10: thousand dollars just.

772
00:39:24,040 --> 00:39:25,560
Speaker 11: To say that you're interested.

773
00:39:25,800 --> 00:39:28,040
Speaker 10: Wow, because they have, you know, so many people lined up,

774
00:39:28,080 --> 00:39:29,319
Speaker 10: so they want to make sure that you have the

775
00:39:29,360 --> 00:39:31,560
Speaker 10: cash and you're not wasting their time by checking these out.

776
00:39:32,239 --> 00:39:34,920
Speaker 10: But more luxury hotels sold in Dubai and Race Quarters

777
00:39:34,920 --> 00:39:37,239
Speaker 10: than any other city that includes New York, and that

778
00:39:37,280 --> 00:39:39,200
Speaker 10: includes London too, So it is the.

779
00:39:39,160 --> 00:39:41,960
Speaker 11: Hot it is. I hear about this as much as

780
00:39:41,960 --> 00:39:43,479
Speaker 11: I hear about Miami or even more.

781
00:39:43,520 --> 00:39:45,840
Speaker 7: Now it seems like Dubai is just kind of like

782
00:39:45,880 --> 00:39:49,799
Speaker 7: the hot Yeah, certainly the pictures are beautiful, but.

783
00:39:49,880 --> 00:39:53,239
Speaker 10: If you have twenty four million, then that's used to.

784
00:39:53,239 --> 00:39:54,080
Speaker 6: Go all the time.

785
00:39:54,400 --> 00:39:59,160
Speaker 2: Major shout out to Peter Grower, our chairman, who really

786
00:39:59,280 --> 00:40:01,040
Speaker 2: forcefully led the build.

787
00:40:00,840 --> 00:40:01,840
Speaker 6: Out of Dubai.

788
00:40:02,480 --> 00:40:04,400
Speaker 2: And I was there right at the beginning of it,

789
00:40:04,480 --> 00:40:06,600
Speaker 2: and you know, they had a slope period and look up,

790
00:40:06,640 --> 00:40:10,400
Speaker 2: I'm like, look at all the cranes on the buildings,

791
00:40:11,040 --> 00:40:15,080
Speaker 2: And our economic leader in Dubai said time, the cranes

792
00:40:15,120 --> 00:40:17,440
Speaker 2: are there because it's so slow they have no place

793
00:40:17,480 --> 00:40:18,480
Speaker 2: to put the cranes.

794
00:40:18,880 --> 00:40:21,759
Speaker 6: So it's boom and bust. And right now it's a

795
00:40:21,880 --> 00:40:22,720
Speaker 6: huge boom.

796
00:40:22,800 --> 00:40:26,040
Speaker 2: I mean it's just huge, huge boom, say an Abu

797
00:40:26,080 --> 00:40:28,640
Speaker 2: Dhabi is Well, let's go next podcast.

798
00:40:28,719 --> 00:40:29,399
Speaker 11: Okay, this one.

799
00:40:29,480 --> 00:40:31,600
Speaker 10: If you're looking to live a bit longer, you might

800
00:40:31,640 --> 00:40:34,799
Speaker 10: want to extend your daily walk. Okay, this was in

801
00:40:34,840 --> 00:40:35,760
Speaker 10: the Washington Post.

802
00:40:35,840 --> 00:40:37,200
Speaker 11: Okay, it's years long.

803
00:40:37,320 --> 00:40:39,480
Speaker 10: See see I knew it.

804
00:40:39,520 --> 00:40:40,040
Speaker 11: I knew it.

805
00:40:40,680 --> 00:40:42,680
Speaker 10: So you have to walk for at least ten to

806
00:40:42,719 --> 00:40:46,600
Speaker 10: fifteen minutes straight. That's better for you than doing five

807
00:40:46,640 --> 00:40:49,400
Speaker 10: minutes here, five minutes there, walk to the you know,

808
00:40:49,440 --> 00:40:51,880
Speaker 10: the store across the street. That doesn't count. You got

809
00:40:51,920 --> 00:40:54,200
Speaker 10: to do ten to fifteen minutes one.

810
00:40:54,080 --> 00:40:58,400
Speaker 7: Time in office. This sounds like verbati. Walk to penn station.

811
00:40:58,520 --> 00:40:59,680
Speaker 7: That's that'll get it done.

812
00:41:00,440 --> 00:41:02,520
Speaker 2: Time ten to fifteen minutes equivalent.

813
00:41:02,640 --> 00:41:03,560
Speaker 3: Oh yeah, big time.

814
00:41:03,600 --> 00:41:05,239
Speaker 10: You can tell it. I'm not going to go into

815
00:41:05,280 --> 00:41:06,680
Speaker 10: the weight invest because we've been there.

816
00:41:07,160 --> 00:41:07,560
Speaker 6: Donait?

817
00:41:08,760 --> 00:41:11,239
Speaker 2: Do you do? How many steps do you need to

818
00:41:11,280 --> 00:41:13,480
Speaker 2: do to be Lisa Matteo.

819
00:41:15,640 --> 00:41:17,279
Speaker 11: Us that's time?

820
00:41:17,719 --> 00:41:18,759
Speaker 6: How many do you need?

821
00:41:20,280 --> 00:41:21,920
Speaker 2: I don't knows.

822
00:41:21,400 --> 00:41:25,680
Speaker 10: Everything about ten to fifteen thousand you know, I catch

823
00:41:25,680 --> 00:41:28,360
Speaker 10: it on the weekend. You know, that's how it works.

824
00:41:28,360 --> 00:41:29,799
Speaker 10: But yeah, they usually say ten.

825
00:41:30,080 --> 00:41:31,200
Speaker 11: This is a weight person.

826
00:41:31,320 --> 00:41:33,040
Speaker 7: She's like pumping irons.

827
00:41:33,640 --> 00:41:35,440
Speaker 6: Thank you so much, Lisa, go back to your breakfast.

828
00:41:35,440 --> 00:41:38,640
Speaker 6: Lisa Mateo, Thank you so much for the newspapers.

829
00:41:38,800 --> 00:41:43,600
Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify,

830
00:41:43,719 --> 00:41:48,000
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,

831
00:41:48,160 --> 00:41:51,400
Speaker 1: seven to ten am Easter and on Bloomberg dot Com,

832
00:41:51,520 --> 00:41:55,319
Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app.

833
00:41:55,640 --> 00:41:58,760
Speaker 1: You can also watch us live every weekday on YouTube

834
00:41:59,040 --> 00:42:01,040
Speaker 1: and always on the Bloomberg terminal